Newman hits back over audit concentration

Jeremy Newman. BDO Stoy Hayward

Jeremy Newman hits back

Those who deny concentration is an issue for audit firms are trying to keep
the debate ‘stuck in the past,’ BDO Stoy Hayward managing partner Jeremy Newman
has claimed.

In an article for Accountancy Age, Newman takes issue with those who
have criticised the firm for allegedly ‘misusing’ the research of the London
School of Economics to make a point about audit quality.

The LSE’s research suggested concentration had led to higher fees, a point
that BDO has been quick to publicise. ‘It is disappointing that some have chosen
to dismiss these conclusions as merely BDO Stoy Hayward’s interpretation,’ he

His comments are undoubtedly aimed at Richard Sexton of
PricewaterhouseCoopers, who suggested BDO ‘misused’ the research.

Newman says it is widely agreed that concentration is an issue. ‘It is
disappointing that some have not recognised this and want to keep the debate
firmly stuck in the past. These same people continue to promote the myth that
size is a proxy for quality to enable them to justify the status quo,’ he says.

PwC declined to comment on Newman’s remarks.

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